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Adopting to Urban Enrolment Declines

Many of the nation’s largest urban school districts have experienced enrolment declines over the past decade, and struggle to keep costs down while losing revenue, a new report found. Half of the 100 largest school districts have seen enrollment decreases from 2005 to 2010, with some declining nearly 33 percent, according to “Adapting to Enrollment Declines in Urban School Systems: Managing Costs While Improving Educational Quality,” from the Boston Consulting Group.

These declines are caused in part by student shifts to charter schools, which are considered public but are not managed by the district, according to the report, and factors such as population declines in large metropolitan areas, decreasing births, and increasing enrollment in private schools. To balance budgets, many districts have increased class sizes, laid off teachers, and cut programs, all of which negatively impact student achievement.

With a declining enrollment, urban districts face many challenges, the report states, including unrecovered classroom costs (such as aide expenses), higher fixed school-level costs (personnel and facilities expenses), sticky central offce costs (including operations support and leadership staff, which tend to be diffcult to cut). “This is an issue that’s facing many districts, and we wanted to provide some thoughts on alternatives to the traditional response,” says Nneka Rimmer, partner and managing director at the Boston Consulting Group and a co-author of the report.

A large part of the problem is poor planning: districts often use a single-year budgeting cycle, and can only see enrollment declines late in the cycle, which leads to laying off teachers and increasing class sizes at the last minute, she adds.

The report identifies steps that districts can take to manage costs with minimal impact on students. They include:

“The big takeaway is that this is manageable,” Rimmer says. “Enabling district management to think on a multi-year budget schedule allows them to lift some constraints and think of many more creative opportunities than they’d have in a single-year budgeting cycle.” To read the report, visit www.bcgperspectives.com.